We describe the development of a bifunctional linker that simultaneously allows site-specific protein modification and palladium-mediated bioorthogonal decaging. This was enabled by a thioether binding motif in the propargyl carbamate linker and a readily available palladium complex. We demonstrate the efficiency of this reaction by controlled drug release from a PEGylated doxorubicin prodrug in cancer cells. The linker can be easily installed into cysteine bearing proteins which we demonstrated for the construction of an anti-HER2 nanobody-drug conjugate. Targeted delivery of the nanobody drug conjugate showed effective cell killing in HER2+ cells upon palladium-mediated decaging.